Visa country manager, sub-Saharan Africa, Jabu Basopo during a media briefing on February 19, 2013. Photo/DIANA NGILA
What you need to know:
The shift to cashless payments, however, saw more people swiping their cards at shopping points compared to using the cards to withdraw cash.
Visa is the largest provider of payment card networks in the world and mainly competes with MasterCard in the region, which also set up a regional office in Nairobi.
The increased use of plastic cards to pay for goods and services saw Visa point of sale transactions grow by Sh26 billion last year, the company announced Tuesday.
The payment services company, which opened a regional office in Kenya last year, saw the total volume of transactions using Visa cards, including ATM withdrawals, remain flat at about Sh522 billion ($6 billion) during the year.
The shift to cashless payments, however, saw more people swiping their cards at shopping points compared to using the cards to withdraw cash.
Point-of-sale (POS) transactions have grown from 10 per cent of total Visa transactions to 15 per cent in the last one year, a $300 million difference.
“A five per cent increase is significant. It’s a change in behaviour and it’s important for us as we try to get more Kenyans to use their cards,” said Visa’s country manager sub-Saharan Africa Jabu Basopo at the Visa offices in Nairobi Tuesday.
Data from Central Bank of Kenya, released in November 2012, showed that cashless transactions grew by 77.9 per cent in the first nine months of the year.
Goods and services worth Sh77.8 billion, compared to Sh43.7 billion the previous year, were paid for through POS terminals during this period with the number of debit cards issued increasing to 8.6 million from 7.14 million.
Largest provider
Visa is the largest provider of payment card networks in the world and mainly competes with MasterCard in the region, which also set up a regional office in Nairobi.
Kenya’s economy is still cash-based, as most merchants are not connected to infrastructure that would support payment using cards.
To further grow its footprint in the country and reach a wider base of people, the company is looking to roll out a mobile facility that will enable the roadside trader have a point-of-sale by connecting through their phone.
The M-Visa, its mobile payment platform, is currently undergoing pilot runs in Rwanda and is expected to be launched in other markets including Kenya by March.
“We want to perfect it. Once we are happy with the product we will roll it out with Kenya being one of the focus markets,” Mr Basopo said. “We are investing in technology so our footprint can expand to even reach the roadside seller. The objective is to ease the use of cards.”
The acquisition of Fundamo, a mobile financial service provider for financial institutions, has helped it to provide the next generation of payment solutions.
Visa saw the number of cards issued in the market in the past one year grow by one million to six million, according to Mr Basopo, with client banks increasing to 25 from less than 20.
MasterCard has also been rolling out initiatives to grow its footprint in the country. On Tuesday, it announced a new partnership with Chase Bank and the University Students Community Organisation (UNISCOO) to roll out a pre-paid card targeting the youth.
The card is aimed at raising financial inclusion and encouraging the youth to take up cashless transactions.
